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Gold prices lingered near a three-week low on Thursday as the initial safe-haven demand from the Middle East conflict faded, while investors awaited comments from U.S. Federal Reserve Chair Jerome Powell for more clues on interest rates.

Spot gold was down 0.1% at $1,948.39 per ounce by 0337 GMT after hitting its lowest since Oct. 19 on Wednesday. U.S. gold futures fell 0.2% to $1,953.50.

A slew of Fed officials who spoke this week maintained a balanced tone on the U.S. central bank's next decision, but noted that they would focus on economic data and the impact of higher long-term bond yields.

Powell did not comment on monetary policy or the economic outlook in prepared remarks at a conference on Wednesday. He is scheduled to speak at another conference later in the day.

"He'll (Powell) probably try and maintain the higher-for-longer narrative because it's not within their interest to admit to markets that cuts might be coming," City Index senior analyst Matt Simpson said.

"Gold would have the potential to retest and break above $2,000, but now is not the time."

Futures point to a roughly 14% chance of another hike by January, but are pricing in an 18% chance that rate cuts could come as early as March, according to the CME FedWatch Tool.

Lower interest rates boost the appeal of zero-yield bullion.

"The war-risk premium has also faded as the Israel-Hamas war shows little sign of escalating. However, strong central bank buying remains a supportive factor (for gold)," ANZ analysts said in a note.

Gold prices rose above the key $2,000-per-ounce level last week after escalating tensions in the Middle East lifted demand.

Spot silver fell 0.5% to $22.41 per ounce, while platinum gained 0.4% to $869.70.

Palladium slipped 0.9% to $1,040.77, hovering near its lowest level since 2018.